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Alpha Building Fiasco Five Years Later

by Lewis Loflin

Update January 2015: There's no evidence of any new jobs we were promised when Alpha got tens of millions in corporate welfare to relocate from Abingdon to Bristol. In fact there have been scores of job losses in coal across the region as cheap natural gas and the EPA are destroying the coal industry.

In addition the new state budget of Democrat Gov. Terry McAuliffe had cut a wasteful $500,000 a year sate subsidy to coal interests after it was proven to produce zero jobs.

In a dirty deal Washington County BOS bought the Alpha are part of a corporate welfare sticking county taxpayers with about $20 million in debt for a building we didn't need. To quote them at the time:

"This is great, not just for Alpha coming here, but for the potential to attract business from all the other companies they deal with. Just having their corporate headquarters in the city - and to have the city's name on their letterhead - is great visibility for the city."

Going on almost six years later this has totally failed with zero prospects. To quote Bristol Virginia officials:

"You don't drop 200 people into an area and not have some effect - more restaurants, more retail."

There you have local taxpayers out between $25 to $300 million and we get a few part time restaurant jobs.

In 2015 the region is suffering an implosion of the labor force as thousands have given up and we have suffered job losses for at least eight consecutive quarters.

The rest of this stands as a testimony to stupid politicians.

"It's a little-known fact that roughly 20 percent of the children in Southwest Virginia live below the poverty line and go hungry every night." Kevin Crutchfield, President Alpha Natural Resources, January 15, 2009

So says Kevin Crutchfield, President Alpha Natural Resources, January 15, 2009 in Abingdon, VA. His company was awarded $16 million in corporate just to move eight miles down the road to Bristol, Virginia from Abingdon. There old office was across the road from a so-called "small business incubator which they also occupied.

This "incubator" cost millions and has simply not created any real jobs, but provides discount office space for existing business and non-profits getting taxpayer grants. When did the taxpayers get into the discount office space business for private companies? This project and the so-called Stone Mill technology park has received millions of tax dollars.

Alpha Natural Resources was recognized for giving $25,000 to the William King Museum in Abingdon, the wealthiest community in the region, so they can buy two Dodge Caravans. (September 29, 2009) As the giddy Bristol Herald Courier reports the gas-guzzlers will be "used to travel to coalfield counties and give art instruction to students who may not get other art classes." Guess they will still go to bed hungry, but will be at least enlightened to the arts. To its credit Alpha has donated thousands to local food banks, etc.

Update: The William E. King Art Center is in severe financial trouble. See William E. King Museum Fiasco and William King Museum Won't be Closing, Sort Of.

As the Courier goes on, "The 'Van Gogh' vans are frequently used to give art instruction to students in Wise, Scott, Lee and Dickenson counties....The William King Museum could not bring art instruction to these children without the support of companies like Alpha Natural Resources and Family Ford. For all the children who will learn something rewarding about art, and their own potential, we say thank you."

We don't have many jobs and some don't have much food, but we sure the have the arts.


The Alpha Deal and Bristol Virginia Utilities

Foundation Coal Holdings, Inc. is the fourth-largest American coal producer by tonnage has agreed to a merger in 2009 with Virginia based Alpha Natural Resources. They have mines in Wyoming and Pennsylvania. Headquartered in Linthicum Heights, Maryland, a fight has broken out on where to locate the new offices. Currently Alpha is headquartered in Abingdon, Virginia, but will move about eight miles to Bristol, Virginia at a cost to taxpayers of about $2 million a mile.

BVU will pay Alpha $1.9 million over 10 years, they got another $4.4 million from the State of Virginia. They also get $1.6 million in free land (about 80 acres) and another $1.1 million in other giveaways. They are expected to employ about 200 including 69 "new jobs" and moved about 131 from Abingdon. The building is expected to cost $20-$30 million and there is consideration that Washington County may buy their old building (that was also taxpayer subsidized) for as much as $8 million. I spoke to one member of the BVU Board who is also on the Washington County Board of Supervisors and she claims there's no decision on the Alpha building right now.

Update: Washington County did buy their old building they still owed millions on it as I understand. The deal was done in back rooms and hid from the public to stifle public opposition. I was lied to at the time. See Washington County Commits to Buy Alpha Building.

To quote the local press on one Bristol official, "This is great, not just for Alpha coming here, but for the potential to attract business from all the other companies they deal with. Just having their corporate headquarters in the city - and to have the city's name on their letterhead - is great visibility for the city."

Mr. Brown of economic development in Bristol, Virginia says, "This will generate a lot of activity in and around [Interstate 81's] Exit 7," said Jerry Brown, the city's director of economic development. "You don't drop 200 people into an area and not have some effect - more restaurants, more retail."

That what he said the City awarded $220,000 in corporate welfare to a Red Lobster restaurant as "industrial development." See Corporate welfare and Red Lobster. Who needs more damned low-wage restaurant jobs worked by illegal Mexicans?

"This is a golden opportunity for the city," said Mayor and BVU board member Jim Rector. They claim the state incentives include performance clauses mandating that the company "substantially" meet those job figures within three years or repay part of the money, Brown said. In the past this has never been enforced and I don't expect that now. They claim company's average salary is about $109,000 annually.

The City planned to give the property to AOL for a data center, but the deal fell apart. They lost out to Buffalo, N.Y. after that state offered millions of dollars in subsidies they couldn't match. The cost for New York was over $1 million per job! In this case the 69 new jobs (Most don't pay anywhere near $109,000) if we get them at a cost of $16 million in corporate welfare is only $232,000 per job. What a deal! Let's all go get a Big Mac and help the local economy.

This page posted 22 November 2009, updated Jan. 1, 2015.